Young should embrace austerity now

The Telegraph

Niall Fergusson reckons young people should be welcoming austerity measures because it means they won’t be paying for the largesse later in life and that greedy old people are indenturing us by way of paying for their bills

Young people should welcome austerity measures because it means huge government debts are less likely to blight their futures, historian Niall Ferguson has said.

The economic historian, who is affiliated to Oxford and Harvard Universities, says wise young voters should insist politicians pay off debts as soon as possible for the benefit and security of their own financial interests.

Speaking at the Reith Lectures on Tuesday, Professor Ferguson will argue the “young should welcome austerity,” adding they “find it quite hard to compute their own long-term economic interests.”

In his first lecture, which will be broadcast on BBC Radio 4 on Tuesday, Prof Ferguson will insist the current public debt “allows the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn.”

“It is surprisingly easy to win the support of young voters for policies that would ultimately make matters even worse for them, like maintaining defined benefit pensions for public employees,” he says in an article ahead of the lecture.

He adds: “If young Americans knew what was good for them, they would all be in the Tea Party.”

Professor Ferguson argues the true size of government debt in Western democracies is many times larger than “deeply misleading” figures issued in the form of bonds because they do not record unfunded liabilities of social security and health care schemes.

“The last corporation to publish financial statements this misleading was Enron,” he wrote.

“These mind-boggling numbers represent nothing less than a vast claim by the generation currently retired or about to retire on their children and grandchildren, who are obligated by current law to find the money in the future, by submitting either to substantial increases in taxation or to drastic cuts in other forms of public expenditure,” he said.

  • GPT

    Sounds good. I think I will start with cutting back on my bills for other people’s superannuation.

  • fossil

    An interesting exercise for an astute person eg: the Owl, would be to calculate the point at which it would be cheaper to pay their personal student loan interest cost, or as it is now subsidize every student loan for the rest of their life.

  • Beans

    Don’t forget unsustainable spending in the tertiary education sector.

    Those Blockade The Budget louts can kiss my asshole.

    • thesorrow&thepity

      those types think pennies fall from heaven, the truth is we’ll have to tighten our belts, the pain in Spain will be felt here as China slows down (from decreasing exports to eurozone & their bursting property bubble) & Chinese demand for our commodities falls. Time for Key to ignore the leftie media spin of mid term slump & to bring out the policies to tackle the hard issues!

  • thor42

    I agree with this article.
    Dare I say it – austerity is **good**. It goes hand-in-hand with fiscal discipline – something that John Key seems to have completely forgotten about, given that Bludging for Families, the DPB and the super eligibility age are still untouched.

    Any truly-intelligent young person would agree with me.

    • Beans

      I daresay we stop calling it “austerity” and give it a more appropriate name: fiscal responsibility. Or maybe, “Don’t Effing Spend What You Don’t Effing Have.” Various local councils might find that the cause of their debt.

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